Money For Nothing

How corporate greed and deception cost AMP its trusted place in Australian life

“Working Australians have been hurt by what’s happened at AMP. People need to be held to account.” Investor

AMP was once a trusted blue chip Australian company but its reputation is now in tatters following evidence before the Financial Services Royal Commission that it charged customers fees for no service and repeatedly lied about it to the corporate regulator.

“Taking money for no service is essentially theft. It would be regarded as theft in any other walk of life.” Corporate Governance expert

On Monday Four Corners investigates how AMP ripped off its customers and details the extraordinary measures it took to conceal its actions.

“Did they really think they could do this legally and get away with it?” Corporate Governance expert

In a revealing interview a former financial planner gives an insider’s account of the tactics used by AMP to cheat customers out of their own money.

“The AMP clients were being charged every month automatically and not receiving a red razoo.” Former AMP financial planner

The former planner also blows the whistle on the company practice of pressuring financial planners to sell in house AMP products even if it meant a client would be financially worse off.

“Every time (a recommendation) came back, regardless of what I had put as an adviser, the product at the end of the advice or the structure was an AMP product.” Former AMP financial planner

AMP began selling life insurance in 1849. Four Corners examines how an iconic company with a trusted place in Australian life could have such a spectacular fall from grace.

“I would never have thought that any of that sort of thing would have been going on in such an institution that has been around for so many years and has been trusted by the shareholders and by the public at large.” AMP Shareholder

Money for Nothing, reported by Sean Nicholls and presented by Sarah Ferguson, goes to air on Monday 23rd July at 8.30pm. It is replayed on Tuesday 24th July 2018 at 1.00pm and Wednesday 25th at 11.20pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC iview and at abc.net.au/4corners

Transcript

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SABRA LANE, ABC RADIO , 16 APRIL: The Financial Services Royal Commission resumes this morning and will hear behaviour about alleged unethical behaviour in the financial advice sector .

SEAN NICHOLLS: In the heart of Melbourne’s legal district … a big story is about to break.

Secrets festering inside one of Australia’s most trusted financial advice companies will soon be exposed.

DAN ZIFFER, “THE BUSINESS” : We had the witness list , we knew AMP was in the box , they’re a huge company , they’re a big name , that’s enough in itself we had no idea what was about to happen

JAMES FROST, AUST. FINANCIAL REVIEW: No one had thought too much about AMP they were seen perhaps not as a headline act in this Royal Commission but boy were they about to become one, what we would see over the next few days would be really quite extraordinary.

ROWENA ORR QC, COUNSEL ASSISTING, FINANCIAL SERVICES ROYAL COMMISSION: This round of hearings will explore some of the issues that directly impact on Australians .. Including the charging of fees for financial advice that is not provided or not provided in full, which we will refer to as fees for no service.

SEAN NICHOLLS: There’s just a hint of what’s to come when the QC dubbed “Shock and Orr” zeroes in on AMP.

ROWENA ORR QC: AMP acknowledged in its submissions that it has engaged in conduct that it characterised as possible misconduct or conduct falling below community standards and expectations in relation to the provision of financial advice.

COMMISSIONER KENNETH HAYNE QC, FINANCIAL SERVICES ROYAL COMMISSION: Mr Regan would you prefer to be sworn or make an affirmation? Make an oath or an affirmation?

JACK REGAN, HEAD OF FINANCIAL ADVICE, AMP : An affirmation’s fine.

SEAN NICHOLLS :Anthony “Jack” Regan is head of AMP financial advice.

MICHAEL HODGE QC SENIOR COUNSEL, FINANCIAL SERVICES ROYAL COMMISSION: And you’ve been put forward by AMP as its witness to give evidence in response to a series of questions that the Commission has asked in relation to misconduct concerning fees for no service?

JACK REGAN : I have.

SEAN NICHOLLS: Over the next two days Jack Regan’s explosive evidence would reveal how AMP had unlawfully charged customers millions of dollars in fees.

MICHAEL HODGE QC : Did that come as a surprise to you, that there was no lawful basis for doing that?

JACK REGAN: No, not a - no. It’s not a surprise that it’s not lawful.

MICHAEL HODGE QC: It’s just obvious, isn’t it … that you can’t charge somebody for 90 days for providing services that you’re not going to provide? You agree with that?

Jack Regan: That’s correct.

PROF. THOMAS CLARKE, UNIVERSITY OF TECHNOLOGY SYDNEY Taking money for no service, is essentially theft.

It would be regarded as theft in any other walk of life. If someone took some money from you in return for a service and didn't provide the service, you would regard that as theft.

THOMAS CLARKE: This must have been one of the most agonising moments in Australia's corporate history.

What were they thinking?

Did they really think that they could do this legally and that they could get away with it?

It was deeply painful, and deeply worrying about the state of honesty and integrity in Australia's corporations.

SEAN NICHOLLS: And in AMP in particular?

THOMAS CLARKE: And in AMP in particular.

ABC NEWS : AMP’s reputation is in tatters after revelations this week it lied to the corporate regulator ASIC and put the interests of shareholders before customers.

ABC NEWS : When they were caught out AMP staff repeatedly lied about it tried to cover it up and discussed how they could keep on doing it.

SEAN NICHOLLS: A blue chip Australian company systematically cheated its customers and covered it up.

The story of how it happened is all the more spectacular given the trusted place AMP has held in Australian life.

TONY DAVIES, AMP SHAREHOLDER: It has been extremely disappointing And in fact, I'd say it's been a shock.

I would never have thought that any of that sort of thing would have been going on in such an institution that has been around for so many years and has been trusted by the shareholders and by the public at large.

SEAN NICHOLLS: The Australian Mutual Provident Society opened its doors in 1849 selling life insurance.

The intention was noble, driven by philanthropy not profits.

STEPHEN MAYNE, SHAREHOLDER ADVOCATE: it started off with a great culture of not making a profit and looking after its customers, and people trusted a venerable financial institution that was there for them.

ROBERT MENZIES, PRIME MINISTER (1962): The building, its sight, the whole dramatic significance of it will add enormously to this city.

But far more than that, sir, far more than the fact that it’s a towering construction in itself I want to say to you that I believe it’s a towering symbol of a constructive contribution to Australian national and individual life.

TONY DAVIES: I can remember as a small boy going down with my father to Circular Quay.

I was blown away by the AMP building, which is 116 metres tall of steel and glass.

And I thought that really represents a very, very strong institution.

It dominated the skyline at the time.

SEAN NICHOLLS: And what did that, what impression did that give you of AMP?

TONY DAVIES Strength and purpose. Solidity and history.

SEAN NICHOLLS: Those values are celebrated in the sculpture adorning its Sydney headquarters.

The Goddess of plenty looks over a young family.

AMP’s promise is to be “a sure friend in uncertain times”.

PROF. IAN RAMSAY CORPORATE LAW, MELBOURNE UNIVERSITY: No matter what stage of life you were at, AMP was there to work with you to plan for your financial future, whether, indeed, retirement was close at hand, or whether, in fact, you were at a much earlier stage of life, and needed to take out life insurance to protect your dependents, AMP was there to help and to work with you.

AMP COMMERCIAL: Your AMP can look proudly at an investment strategy that’s earning money offshore for the benefits of Australians.

SHAREHOLDER: Its absolute blue chip security and it will be good for my old age .

Investor Tony Davies remembers the day well .

TONY DAVIES, AMP Shareholder I was very excited for the first time I'd become a shareholder. And that was a pretty exciting proposition. I'd got shares that were effectively free. So I didn't have to risk any money at the time. And I was quite confident in the AMP as a financial institution. We were given great confidence that the organisation would move forward, and that our shareholdings would grow.

SEAN NICHOLLS: Going public meant a radical shift in AMP’s priorities as it searched for profits.

PAMELA WILLIAMS : AMP did become a much more aggressive company after that.

It became a company that was looking for acquisitions that wanted to grow.

That wanted to be building its share price and expanding its base in every way and that naturally takes it away from its old history.

SEAN NICHOLLS : In the late 1990s, the cashed-up AMP embarked on a string of disastrous decisions.

More than a billion dollars was lost on a hostile takeover of insurance giant GIO .. forcing the early exit of AMP’s American boss George Trumbull .

The Australian Securities and Investments Commission has found that AMP's network of financial planners used flawed advice to lure people into switching super funds, so the company could make profits, and the planners could make fat commissions.

SEAN NICHOLLS: The scandal shone a spotlight on a conflicted business model where financial planners earned commissions on the products they sold.

STEVE JOHNSON, FORAGER FUNDS: The conflict there is pretty obvious that the advisor is incentivized to recommend the product that pays them the most money, rather than the product that is best for the particular client.

SEAN NICHOLLS: So, what does that translate to for what it means for both AMP and the customer?

STEVE JOHNSON: It translates to a lot of bad advice.

PROF. THOMAS CLARKE: It is very dangerous when the institution that manufactures the financial products is also in a direct relationship with the financial advisers who are selling these products, but need to be objective and respect the interests of the clients, and not the interests of the financial institution that's paying them.

SEAN NICHOLLS: It's a classic conflict of interest, isn't it?

PROF. THOMAS CLARKE : It's a terrific conflict of interest, and it's run right through the heart of the financial advice system of Australia, and it needs to change.

SEAN NICHOLLS: ASIC moved against AMP in 2006 , demanding it fix its advice business.

But it wasn’t enough.

STEPHEN MAYNE : ASIC was traditionally very light touch and not particularly aggressive but even in that environment, ASIC discovered all these shocking practises, gave AMP a big whack, made them sign an enforceable undertaking, but the regulatory intervention was not nearly tough enough.

The board didn't actually come in there and fundamentally change the business.

He’s an independent financial adviser in the Illawarra region south of Sydney.

A few years ago he wanted to expand his business and joining AMP’s network of licenced advisers seemed like a good way to do it.

BRETT STRONG, FORMER AMP ADVISOR: They had everything available to suit your business, the marketing of your business, the compliance of your business.

And at that time, I thought that was incredibly valuable cause I could spend time with my clients.

I didn't have to spend time recreating all those things which what is was happening in the independent space.

BRETT STRONG: This document here is the practice set up offer that AMP put towards my practice and said on the basis of you joining we’re prepared to do these certain things for you.

SEAN NICHOLLS: After he signed up, AMP gave Brett Strong 2,000 clients who no longer had an adviser.

When he started looking at their files he was shocked to learn they’d been charged for services that weren’t delivered.

BRETT STRONG: Every month you would see the adviser fee.

And it didn't matter how long you went back, that adviser fee was there monthly, being taken out of those super funds or those policies.

To me, when you ring the client and they say, “Who are you, where you come from?”, and you tell them that you're from AMP and they say, “Well I haven't heard from anyone from AMP for 15 years, or 20 years when someone knocked on my door and sold me a policy.”

That to me, smells very, very bad. It made us feel very, very uncomfortable.

SEAN NICHOLLS: So what you're saying is these AMP clients were being charged adviser fees without any service?

BRETT STRONG: The AMP clients were being charged every month automatically and not receiving a red razoo.

Sorry, but they weren't!

They weren't receiving anything.

SEAN NICHOLLS: Brett strong says that AMP started pushing him to sell AMP financial products over any others.

BRETT STRONG: They were trying to get my existing book of business over to their particular products and services.

And that didn't sit well with me, because being in the independent market space, I already knew that there were alternative options available, and as an adviser I was utilising those alternatives.

I thought that in the best interest of my clients, clients that I see on weekends, clients that I have coffee with, clients that I have been invited to their children's weddings to.

SEAN NICHOLLS: So that must have put you in a terrible situation?

BRETT STRONG: Conflicted, uneasy, scared.

None of these words are even close to describing how I felt at the time.

SEAN NICHOLLS: Brett Strong says AMP pressed him to sell an in house product to a client that would have left them thousands of dollars a year worse off.

When he refused he says he was reprimanded.

BRETT STRONG: They went through the process of explaining to me why I wasn't fitting into the AMP culture, and that I was not a very good adviser because I was not performing.

That was quite earth shattering.

But it was like a weight had lifted off my shoulders.

It was the best news I'd heard in a long, long time.

SEAN NICHOLLS: That day Brett Strong handed back his AMP licence.

To this day he regrets being seduced by the financial giant.

BRETT STRONG: The amount of additional things that they put in front of me made me feel like a corporate slut; a bitch to somebody's command.

A puppet would be the best way to describe it.

Somebody above me was always going to pull my strings and I was too naïve to realise it, or I was too blinded by the incentives.

SEAN NICHOLLS: Would you ever work for AMP again?

BRETT STRONG : No to be told you’re no good at something because you didn't sell or pressure a client into selling, or buying a product.

Brett Strong’s story goes to the heart of the culture scrutinised by the Royal Commission and in particular “fees for no service”.

ROWENA ORR QC : AMP made a series of acknowledgements of conduct that it described as involving possible contraventions of the Corporations Act and the ASIC Act in relation to fees for no service.

SEAN NICHOLLS: The Royal Commission threw a spotlight on how AMP had been ripping off its customers for years.

BEN HARDWICK, SLATER AND GORDON LAWYERS : For AMP, lists of clients who used its financial planning services were assets that could be traded.

In circumstances where a financial planner retired or moved occupation, that left a client without a financial planner.

Now rather than stop charging fees for service, what AMP did was continue to charge fees for service in circumstances where no services were being provided.

PAMELA WILLIAMS: I think in fact this was a dirty little secret for the whole financial sector, they'll just keep charging you those fees and they won't tell you.

You'll get nothing for it.

You get no service.

You’ll get nothing.

MICHAEL HODGE QC: We should be clear about this this problem has been occurring continuously at AMP since 2009 hasn’t it?

JACK REGAN: Yes, that’s correct

SEAN NICHOLLS: AMP first owned up to stinging customers with fees for no service in 2009 telling ASIC it was a mistake but it didn’t fix the problem.

In 2010 one of AMP’s lawyers warned a manager that charging fees for no service was illegal:

“If you want to maintain the planner service fee, you need to provide the client with the services that the former planner agreed to provide, and the client agreed to pay for … it goes to AMPFP meeting its legal obligations of acting ‘honestly, fairly and efficiently’.”

SEAN NICHOLLS: Despite this warning fees for no service continued.

THOMAS CLARKE : For the company executive not to fix the problem very quickly, and to ensure it never occurred again, for them to simply carry on regardless, it shows that there's something deeply flawed in the culture and the incentive system of AMP.

Something that needs to be rooted out and eliminated forever if AMP is ever to hold the trust of the wider community again.

SEAN NICHOLLS: What was driving that do you think inside AMP, that sort of attitude?

Financial planning is about working with a client understanding what the client’s goals and aspirations are and then setting a course to help them achieve that .

SEAN NICHOLLS: AT the Royal Commission, Michael Guggenheimer would become a central figure in the fees for no service scandal.

In 2011 an AMP manager told him and a senior colleague that more customers had been ripped off … and ASIC should be alerted

But Michael Guggenheimer argued against this:

“I'd like to challenge the notion of this being a breach, it's not an AFSL requirement, it’s a business rule. Happy to chat about it if you need any context to help discussions with Legal...”

MICHAEL HODGE QC : And as it turned out, no breach notice was ever given to ASIC in 2011 in relation to this?

JACK REGAN: That’s correct.

MICHAEL HODGE QC Do you know why no breach notice was given to ASIC in 2011 ?

JACK REGAN : As I understand it there was a decision taken based on legal advice not to issue the breach notice .

PROF IAN RAMSAY: So that sort of evidence, I think, is just yet more of an indication of how, over an extended number of years, AMP has not preferred the interests of its customers, but in fact has preferred the financial position of AMP itself.

After all, complying with the law is absolutely essential for all companies, including large financial institutions.

Once you're on notice of a possible contravention of the law, you need to investigate it.

You need to fix your systems.

Clearly, that wasn't done.

SEAN NICHOLLS: In 2015 after ASIC launched a major investigation into fees for no service , AMP was forced to admit it had again wrongly charged clients.

AMP blamed processes which “have failed in some instances”.

But AMP was only telling half the truth.

MICHAEL HODGE QC : The processes didn’t fail, did they, Mr Regan?

There was a deliberate decision made by AMP to retain fees on some of these clients?

JACK REGAN: As I recall, I think it’s both.

MICHAEL HODGE QC: In some cases there was a failure of process, but in other cases it was a deliberate decision by AMP?

JACK REGAN: That’s correct.

MICHAEL HODGE QC And AMP didn’t tell ASIC that they had made this deliberate decision?

JACK REGAN: That’s correct.

SEAN NICHOLLS: Inside AMP the warnings about fees for no service kept coming.

In mid-2015 an AMP manager cautioned that fees must be switched off for a group of clients in between advisers:

“We need to transfer them and dial down the ongoing fees so that we do not breach ASIC requirements”

Despite the warning, AMP financial planning managing director Michael Guggenheimer gave the go ahead to keep charging customers for 3 weeks, “so we do not lose the value of the service fees”.

MICHAEL HODGE QC : What we seem to be seeing is that a conscious decision is made to protect the profitability of AMP at the expense of complying with AMP’s licence. Do you agree?

JACK REGAN: Yes, that’s – I believe that’s what that shows, yes

SEAN NICHOLLS: All the while AMP continued to cultivate its reputation as a community minded corporate citizen.

Through its “Tomorrow Fund” AMP made an annual $1 million donation to community leaders.

CRAIG MELLER CHIEF EXECUTIVE, AMP(NOVEMBER 2015) : it’s a program I’m very proud to be associated with at a professional level but also at a personal level.

SEAN NICHOLLS: Away from the public gaze AMP was behaving very differently.

AMP misled ASIC again with a letter to the regulator saying processes were in place to stop customers being wrongly charged.

MICHAEL HODGE QC : Now, this is, again, part of the fiction being maintained by AMP with ASIC at this time .

JACK REGAN: I will agree that the services were not being maintained as represented in that letter, yes.

COMMISSIONER KENNETH HAYNE: You reject the word “fiction”, Mr Regan?

JACK REGAN : I’m – it’s Mr Hodge’s word, Commissioner.

COMMISSIONER KENNETH HAYNE: Do you reject it?

JACK REGAN: No, I don’t reject it.

SEAN NICHOLLS: As a result of ASIC’s ongoing investigation, by 2016 AMP was paying back customers who’d been hit with fees for no service.

But even then, it lied to some customers, telling them they’d been charged by mistake.

OPERATOR: We want to let you know about a refund you are receiving from us.

Some fees were charged in error to your <account type>

This happened due to an administrative error, which has now been fixed.

We want to apologise for the mistake.

PAMELA WILLIAMS: It's a very revelatory moment about the culture in AMP, that scripts could be given to the call centre to tell people that, we've taken your money in an error, and we'll give it back to you, it's not true. It's not true.

It wasn't an error, and it wasn't an administrative error, but this seems to be the culture that had taken hold in the financial planning division.

SEAN NICHOLLS: Under increasing pressure from ASIC, in the middle of last year the AMP Board commissioned an independent investigation into fees for no service by law firm Clayton Utz.

Chairman Catherine Brenner took a close interest.

STEPHEN MAYNE: She should've commissioned the report and let the report stand.

If it's an independent report, let Clayton Utz say what they want to say.

The report underwent 25 drafts as it was shuttled between Clayton Utz and AMP.

SEAN NICHOLLS: One of the changes Catherine Brenner requested was to spell out that AMP chief executive Craig Meller didn’t know about the illegal behaviour.

Her instructions were passed on by AMP General Counsel Brian Salter:

“I spoke to Catherine earlier today and she had a number of comments which she would like incorporated into the copy of the report to be handed to ASIC on Monday

… Include a statement to the effect that Craig Meller was unaware of the practices or their illegality”.

PROF. THOMAS CLARKE: How could this report possibly be regarded as independent?

How could it be submitted to the corporate regulator, ASIC, as an independent report?

It creates a farce of the regulation of financial institutions in Australia.

BILL WATSON, FIRST SUPER: The way that that was finessed, they're on top of that.

They knew exactly what was happening, and I think that really shows to us the level of hubris, at the AMP Board.

They did things, and they didn't think they'd be held to account for it.

Or they just didn't think it was wrong.

MICHAEL HODGE QC : And do you feel any discomfort at having met with ASIC and said to them, “This is an independent report”, in light of what you’ve now seen?

JACK REGAN: There is a level of discomfort, yes.

SEAN NICHOLLS: The report delivered to ASIC last October found there’d been “systematic improper charging” of fees to customers.

It zeroed in on AMP financial planning chief Michael Guggenheimer for his part in fees for no service:

“Mr Guggenheimer's conduct … demonstrates at best a disregard for AMP customers and at worst a knowing and deliberate intent to continue with business practices which were contrary to the law.”

Clayton Utz said another AMP financial planning executive:

“failed to comply with the minimum requirement of legality let alone the higher standard of best practice.”

Michael Guggenheimer declined to speak to Four Corners.

SEAN NICHOLLS: AMP and Clayton Utz say they stand by the independence and quality of the report.

In its submission to the Royal Commission, AMP said it deliberately charged fees for no service in only a relatively small number of cases.

BILL WATSON: AMP is a company that has lost the trust of its customers, and has let down shareholders, and I think, let down a lot of its employees, who've lost a lot of faith in the company because they did not concentrate on putting their clients' interest first.

MALCOLM TURNBULL(Nov 30, 2017): The only way we can give all Australians a greater degree of assurance about the financial system is through a Royal Commission into misconduct into the financial services industry.

Even as it prepared to front the Royal Commission AMP was putting on a brave face.

We’ve posted a solid increase in underlying profit and an improved net profit. These are strong results and we’ve made good progress on AMP’s strategy.

STEPHEN MAYNE: Well AMP knew that ASIC had been all over them for a couple of years, yet they were briefing out that this was going to be all right, that it was mainly the banks who were in the gun.

So they were clearly ill prepared for the disaster that blew up in their faces, even though they had the material themselves.

LOUISE DAVIDSON: Really, it did appear as though the Board was a bit blindsided by the revelations at the Royal Commission and from our perspective, we want to see a board that has really clear oversight, understands the risks within their business.

We didn't see evidence of that.

COMMISSIONER KENNETH HAYNE Thank you Mr Reagan you may leave the witness box.

JACK REGAN: Thank You Commissioner

PAMELA WILLIAMS: I think for AMP, they had underestimated certainly, the degree to which the sort of evidence that the Commission had in its hands, from ASIC as well as AMP itself, that, that could become so catastrophic.

SCOTT MORRISON ,FEDERAL TREASURER (APRIL 18 ): What has occurred here and what has been admitted to in the Royal Commission by AMP is deeply disturbing.

They have said that they basically charged people for services they didn't provide, and they have admitted to statements that were misleading -- to ASIC and to their own customers, and this is deeply distressing.

These types of, this type of behaviour can attract penalties which include jail time. That's how serious these things are.

PAMELA WILLIAMS: And then you have, on the 27th of April, Rowena Orr saying to Commissioner Hayne that it is open to him to make findings of criminal behaviour.

ROWENA ORR QC: The evidence of Mr Regan demonstrated that senior management and employees of AMP advice licensees were aware that the conduct was a breach of their Financial Services Licences but continued to engage in the conduct.

PROF IAN RAMSAY: Oh, I think that was an unprecedented moment.

Our major financial institutions, including AMP, are built on trust.

Their foundation is trust.

The antithesis of that is when a suggestion is made that senior executives of a financial institution may be open to criminal prosecution.

SEAN NICHOLLS: AMP hit back over Rowena Orr’s submission about potential criminal conduct arguing it should be left to ASIC not the Royal Commission to deal with this.

BILL WATSON: Our view was that the board had to be held to account, for its collective failure to manage the company properly.

One way or the other, their job is look after the company, and to lead it, and they failed to do that.

Based upon the evidence that we saw, these guys weren't up to the job.

MIKE WILKINS, ACTING CHAIR AMP (10TH MAY): The past few weeks have been exceptionally difficult for AMP and for you, our shareholders, for our customers, our advisers and our employees.

It is only right that I begin by reiterating and reaffirming our unreserved apology.

We are truly sorry.

The issues highlighted in our advice business are unacceptable.

We let you down.

We have let our customers down.

And, we have let the wider community down.

SHAREHOLDER: You seem to want to apologise and think that by apologising you’re appeasing all the things that maybe you and the board failed to do, and I think that this is an absolute disgrace.

SHAREHOLDER: there’s a lot of Mums and Dads here that are more than sorry, they would like to have you people on a spit at the moment.

SHAREHOLDER : Your Board has not only destroyed shareholder value, but you’ve gone – you will go down in history as the Board who has stolen from their client base as well and lost trust completely.

NATHAN REES, ASSISTANT SECRETARY FINANCE SECTOR UNION: You’ve presided over and been complicit in an extraordinary trashing of a once great brand.

Over recent weeks, you’ve lost your Chair, you’ve lost your CEO and, most importantly, lost billions of dollars for the people in this room.

SEAN NICHOLLS: Shareholders delivered a smackdown to the Board overwhelmingly rejecting an increase to executive pay.

STEPHEN MAYNE: This was extraordinary because they were angry about the revelations in the Royal Commission.

We've been hearing this for years for AMP, we're sick of the board coups , and the tumult, and the fact that the business has been a shocking performer for shareholders and they haven't fixed the fundamental problems.

SEAN NICHOLLS: AMP shareholders are being courted by five competing law firms for a class action potentially worth hundreds of millions of dollars.

BEN HARDWICK: For Australians purchasing shares in AMP, we're talking about a company that's in the top ASX 20.

When shareholders purchase shares in AMP, they do so on the back of that reputation.

If our clients had known that AMP had been ripping off its clients, they wouldn't have bought AMP shares, They would have bought different shares.

AMP should have been reporting to ASIC the fact that it was charging fees to its clients in circumstances where its clients weren't receiving any service at all.

LOUISE DAVIDSON : Since the Royal Commission, AMP has lost billions of dollars from its market capitalization.

I think this is a really interesting example.

It's a really clear example of the way in which poor corporate culture, mismanagement of social licence to operate, can result in huge shareholder value destruction.

BILL WATSON: This isn't a victimless crime.

Working Australians, people with superannuation accounts, have been hurt by what's happened at AMP.

They'll see a reduction in their account balances, and they'll see less dividend income in the future.

As a consequence of that, people need to be held to account.

SEAN NICHOLLS: AMP has weathered many storms in its long and turbulent history.

But the reputational damage and spectre of criminal prosecution flowing from the Royal Commission are unprecedented.

The company that promises to safeguard its customers’ financial future must now secure its own .

PROF. THOMAS CLARKE: it's going to take a long time, and a lot of work to restore AMP's fortunes.

It will have to live up to its ideals.

People who do practise integrity and risk management will have to be recognised and rewarded, and the incentive systems will have to be directed in that way, and not by simply raising revenue.

TONY DAVIES: It is about the professional and ethical conduct of an organisation.

So there's both the financial loss, and there's the feeling of being let down by a trusted Australian financial institution.

Statement from AMP

AMP acknowledges and has apologised unreservedly for the past misconduct and failures in regulatory disclosures in its Advice business. We have admitted we let down our customers and we are now working hard to make significant improvements across the business to ensure our focus is firmly on helping and supporting our customers.

We are strengthening our processes and governance in financial advice, and are working to accelerate the compensation of customers who received inappropriate advice or were charged fees incorrectly.

Under the leadership of our new chairman, David Murray, we are committed to cultural changes across AMP. We know this is critical if we are to earn back the trust of our customers, employees, advisers, shareholders and the broader community.

And we will do whatever it takes to regain this trust.

Brett Strong

Brett Strong was a self-employed adviser, licensed by AMP Financial Planning for 14 months from 5 June 2013 - 5 August 2014.

After AMP notified Mr Strong of compliance issues including certain advice, he resigned in March 2014. His authorisation was terminated by AMP in August of the same year.

AMP will review the claims made by Mr Strong to the Four Corners program. We encourage any of our advisers or employees - past or present - who have witnessed behaviours they believe don't put customers' interests first to come forward with their concerns. They can do this formally or through our anonymous whistleblower channels. All concerns raised will be taken seriously.

Our advisers are able to advise on both AMP and non-AMP products. They have a legal obligation to only recommend a new product when it is in their client's best interests.

Clayton Utz reportWith regard to the investigation conducted for the AMP Board by Clayton Utz on the fee for no service issue, AMP reiterates its 4 May submission to the Financial Services Royal Commission that the Clayton Utz report could never have been considered as independent under ASIC's Regulatory Guide 112. Nonetheless it was an uncompromisingly direct report into the issues.

ASIC was fully aware that Clayton Utz is a member of AMP's external legal panel, and was acting for AMP in relation to ASIC's investigation into fees for no service.